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tv   Power Lunch  CNBC  February 20, 2013 1:00pm-2:00pm EST

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talking about michael johnson, ceo, they should start by answering one of our 284 questions we submitted publicly two weeks ago. to date, they have yet to respond to one of the questions. it the first reaction from bill ackman, whose billion dollar short pitted him against carl icahn who has taken the stake in herbalife along the long side. all of this coming to a head really in the last couple of weeks on this very program. herbalife announced better than expected earnings. outlook topped expectations as well. stock not getting a lift off of that, down 2.75%. now the first comment from bill ackman. all right, earlier in the show, we asked to you weigh in on our toll brothers debate and desite whether the bear or bull won. we have tallied results. our toll brothers bull made the better argument. you want it make a quick comment there? >> yeah. just one thing, a lot of negative news is out thereabout
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else to selling prices being lower. the reason for that is selling condos on 65th street that had a much higher selling price so it makes that case stronger going into the spring selling season. >> you got a final trade while we're at it? >> i could. tyc, tyco. there were rumors there would be a buyout here. i think it comes sooner rather than later. all right. >> berkshire hathaway within i bought it. looking for a hundred dollars. we got it, now can get 105. >> this is up with of the places of value in healthcare. i like it. >> pete? >> under the radar, pharmaceutical, i'm looking at glaxo. >> follow me on twitter. "power" starts now. >> the second half of your trading day begins now. >> good afternoon, everybody.
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new challenge to j.p. morgan ceo jamie dimon. coming from several major investors who want an independent chairman. do they have a chance of replacing him as chairman of that company? we have the woman behind that push. and, suze says. suze orman will join us today. on the docket, the state of the housing market. are you bet are off buying or renting right now. well talk about rollover iras, save willing for your kids' college debt. taking sense to more americans about money than anyone else in this country. suze orman with us all hour today. all that tech money outwest. what are they doing with it? those tech billionaires, have a new way to change the world. they have a big announcement coming up this hour, and we'll take it. michelle is in for sue with the ny s.e. and we will get downtown in a moment but we want to sh t
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start, michelle, with investment firms and jamie dimon. they want an independent board chairman. powerhouse up 31% in the past six months. kayla tausche has the bumping up the jie and on the board. >> one executive usually it serves in the role. dimon says this is due to inadequate oversight with the london whale trade. this is new york city pension plans. holds about $820 million over just less than 1% in jpm shares. new york city comptroller john liu says, j.p. morgan would be unable to instill confidence. as lead independent director,
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meeting with the board with jamie dimon on certain matters. they are neither for or against splitting. it depends on the company's leadership at the time. since proposals are just proposals, they don't create real need for the company to address them. it was on jpo morgan's proks proxy last year. they saw 41% of shareholders support it. gmi ratings says what that number did is signal no confidence saying quote if 30% of your customers were unhappy, would you take that seriously. normally splitting the role is best for j.p. morgan quote is now believed to generate more profit than any bank in the world. i'm not sure how much an independent share person can. it is not sure what is believed best for them at this point. >> let's go to michelle at nyse. >> well talk with lisa lindsay,
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from the american federal state and municipal em employers. outline this wp what is the mission? >> we think that j.p. morgan is such a large financial institution. it has demonstrated an inability to control risk. as evidenced not only by the lond london whale, but the money-laundering, cease and desist order. and we need someone looking out for us a on the board and running the board. >> reduce risk, is what you are saying. >> that's right. >> the fact that j.p. morgan compared to nearly every other bank out there during financial crisis, that doesn't outweigh all of those things that you mentioned? that doesn't give you any belief? jamie dimon's ability to manage
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risk in the middle after cries snis. >> no. this isn't just about one person. we don't think that any person should be -- should hold these two roles. look, we need to start -- we need to stop treating our bankers like pop stars. if lindsay lohan has a melt down in her limo, no one suffers. if jamie dimon loses $6 billion or j.p. morgan and other billing banks drive our economy off after cliff again, well all pay the price. >> i guess would he argue he is one of the people this who wasn't driving the economy off the cliff at one of the worst moments so maybe he deserves more credit. let me ask you, they have a lead director. you're not satisfied with that? >> no. none of the shareholders are in the board room. and jamie dimon is the chair. he sit at the head of the table, i would think, or whatever the chair sits. he is running that meeting.
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>> you know, jamie dimon is in charge of the board setting his compensation. >> when you argue with goldman sachs about the issue, they bow to pressure from your organization and put in a lead director and you seem satisfied with that at the time. so why isn't that satisfied by j.p. morgan? >> we were satisfied as an interim measure and we need the large financial institutions that wrecked our economy to do better. >> are you going to continue with j.p. morgan or -- >> there are other share holders who have taken up that mantle this year. >> do you have any empirical evidence that a bank is safer with a different ceo and chairman. >> separate chairman/ceo is standard practice. it is only in the united states where that is not the norm. >> i would say there are bank fail urts all over the world that we've seen, where they had separate chairman and ceos. okay.
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>> also, sony's bank failure have shown in part it was due to corporate governens. that the only thing we can control at this point. >> lisa, thank you so much. she is with ask me. while jamie dimon was given rock star status on wall street, brian moynihan was told he was not the job np. why in in 2008, bank of america stock value went down. now, 73% pay increase to $12.1 million. >> michelle, thank you. the market is taking a slight breather but we have big runs for the bull this year. dow up almost 7% so far in 2013. all-time high. s&p almost almost 7 percent in year. closeding in an all-time high
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there. then, there's nasdaq. now sitting at 12-year high. but new data shows there's still some value there. seema mody exploring it all in times square. >> we crossed an entire hurdle, a key psychological level for traders and not to mention a 12-year high for nasdaq. from a technical perspective, maximum group says a close above this level would confirm a break-out in technology shares. citi analyst says valuations will help tech as a sector outperform in 2013. in addition, citi says semi equipment records are down year over year and chip group tends to trade up when new capacity additions slow. chips have been on the tear. philadelphia semi conductor index outperforming ind ind sees.
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inteal, kla-tencor, qualcomm to name a few. some say this could continue to lift the nasdaq higher. >> thank you, seema, very much. power pitch strad straight ahead. and a woman with her finger on the pulse of the great american economy. there she is. suze orman. she needs no introduction but we introduced her anyway. we are talking your house with suze. ♪
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diane lives in bethesda, maryland. hey, diana. >> that's right, michelle. housing is down month to month in january missing expectations bay lot but driven by the always volatile multifamily sector. single family rose just under 1% but up 20% since july 2008. multifamily is down month to month but still up 35% from a year ago and building permits beat expectations up nearly 2 frers december and 35% on the year. but this as mortgage rates continue to rise. the 30-year fix now stands at 3.78% and that is a seven-month high. all of this on a still shaky housing recovery which is not looking forward to the possibility of big cuts under
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sequestering. that is not only the ability to make new loans and finance mortgages but to sell the foreclosures it has. it could hit anybody trying to get a mortgage, if they lose a job or temporary furlough. we have more of this on the blog. >> diana, if you can hang out there in a cold weather, i want you to join in the conversation now with suze orman, of course the host of the suze orman show. author, speaker, on tour and all about a good egg. she will talk a little bit about housing. let's talk first about whether you think the housing market has gotten a little ahead of it self. are people overly enthused? >> yeah. i think people are way overly enthused, tyler. you see interest rates go up. oh, my god, if i don't get in now, i will miss the 2 1/2%. so they are trying to buy, even
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though in my opinion, they can't afford it. we have danger. when people start acting irrationally. we have irrational things that happen after that. as diana said -- go ahead, jump in. >> suze, i just want it ask because it is such a rare opportunity, but what do you think there are so few houses on the market right now. a lot of folks say if there is so little out there then maybe i should sell now and i can get the higher price. you see prices going up but is that real m your mind. >> i don't think so. you know this anybody than anybody. i listen to you all the time. why are houses going up? they are going up for the wrong reasons. because interest rates have been low. and because investor have been buying. you want houses to go up because the job mark set stable. people are making money so they are lie bying a house. economy is good. that's not what is happening here. so people need to be careful. if you are going to sell a house, don't sell a house
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because now is the time to sell the house. you think this is the -- you sell a house because you have to sell the house. every time is a good time to sell the house if you can get a buyer to bite house when you don't need that house or want that house any more. >> let's talk about who should buy and who should rent in this economy today. because we've had this article of faith and public policy to support the notion that everybody virtually should own their own home. i don't think you agree with that. i sure don't. >> you own your own home when you can afford to do so. here is the problem. your rent is $1,000 a month. now you have a mortgage payment. $1,000. they go oh, i can afford that. $1,000 rent. $1,000 mortgage. wrong. it is mortgage payment, property taxes, property insurance pb possibly pmi if you're not putting 20% down and maintenance. you need to add 40% to your mortgage so that's $1400 a month and that's probably what it will
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cost to you buy a home per month. but it is not just that tyler. it is, is your job stable? do you have 20% to put down? can you afford a 15 or 30-year fixed rate mortgage and do you have an eight-month emergency fund besides the 20% to put down? if all that is true, okay. you can buy if it is not, you better continue. >> diana, i used to have a rule of $300. anything that went wrong in my house was $300. that was a long time ago. today is a $1,000. you better be able to take care of that. those expenses, because they happen. >> i think renters who never owned a home are very unrealistic what it really costs to own a home. not only do you have to buy a home but when you buy a home, there are closing costs. you have to pay to move in. then you want your house to look good because it is a brand new house so you go out and by new furniture.
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before you know it, you're in debt. make sure that your job is secure. even if it's not secure, you can end up in trouble. >> diana, you get the last question for suze. >> suze, we are seeing a big trend. down sizing baby boomers, who have seen at housing crash and what it has done to their parents, moving toward the multifamily apartment sector and into single family rentals because they don't want the hassle of homeownership and because they are afraid of what the economy holds. we are seeing it across that generation and it is what is fuelling the multifamily housing starts. and big surge in rent prices. even as rent rates go up we are still seeing that demand on the rental side which doesn't bode well for homeownership and demand. >> we will leave it there and have more for suze. we will talk about retirement, college debt and the rising gasoline prices. suze, thanks for being us. >> any time, ty. >> check out the suze orman show, of course.
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cnn and fox news, the suze orman show beat their ratings last week. >> what else is new. >> lets's go to market flash wih josh lipton. >> i spoke with a few analyst who covered the company, they don't know why we had this jump. no news. they do point out there are spikes like this before with chatter around sales and take out but no news to pin this on. wendy's enjoying a jump on solid volume. back to you guys. >> thank you very much, josh. next scrambling for vc money on television. >> coming up, power pitch. start-ups, give us their 60-second pitch. >> my name is jonathan cedar. >> we give you inside into the fast-paced world of venture capital. >> what exactly are you selling to? >> do they have what it takes?
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>> are you in or out on biolife. >> stay tuned to find out. ♪
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[ male announcer ] to hold a patent that has changed the modern world... would define you as an innovator. to hold more than one patent of this caliber... would define you as a true leader. ♪ to hold over 80,000... well that would make you... the creators of the 2013 mercedes-benz e-class... quite possibly the most advanced luxury sedan ever. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. i'm tyler mathisen and this is the power pitch. start-up founders get 60 seconds and not a second more to make their pitch. then our panel of experts get a
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chance to react to their business and provide insight into the fast-paced world of venture capital. jonathan cedar is co-founder of biolife. a product design engineer who left his consulting job in 2009 to join his design for the solutions of real world problems. here is his pitch. >> hi, my name is jonathan cedar. i'm ceo of biolife, a company making green. half of the country cooks on smoky fires leading to 2 million premature deaths this year. twice as many people that die from malaria. same families lack access to electricity but own cell phones and spend substantial portions of their income keeping them charge. we have the biolife home stove.
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product generates electricity from the waste heat of the fire and with that it is able to deliver 90% reduction in mobile phones and led lights. we create the biolife camp stove which is for use by u.s. and european emergency preparedness and recreation customers. over the next five years we will bring clean cooking an electricity access to over 1 million homes. >> jonathan is on the right side of your screen. he cannot react to our critiques just yet. diana, real estate reporter, john steinburg president and coo of buzz feed. more executive than resident at polaris ventures and google's teams. folks, let's huddle up. injury reaction, diane. >> i'm interested in how he will bring it to the u.s. market in the u.s. when we talk about either men i preparedness and moving things we do in the home outside the
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home. >> during sandy in washington square park jonathan had these set up charging people's phones. that's when i saw it. it was in the times. what does it cost to actually make this thing? >> jonathan cedars with us now. come on in. i see you brought your stove. you are now officially with your stove appropriately enough in what we call the hot seat. we will ask you a few questions here and you get to answer and respond to our families. jonathan, why don't you ask. >> i want to understand, what the connection between the cook stove and home stove? is there a cross subsidies? how does that impact the margin? >> we are not like tom's shoes. it is very different. the camp stove is an accessible market with long-term capital into the emerging markets where over the long run we see a very profitable business but we know it'll take us a longer time and more capital to get there. >> diana? >> when exactly are you selling to? how are you going to market
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there? are you looking at governments or organization to go to these countries? >> we are manufacturer and wholesaler. we work with retailers in those markets who understand their community. who have a proven model of distribution for energy and energy-related product in their markets. our stoves sell for about the same price as a cell phone in those market. we believe that is accessible -- >> what will you sell this little di device in cam stores to get started. >> this is $130 in u.s. markets. for sale at biolight and will be out at rei and other retailers in the spring. we target a retail price for $40 for the home stove which is different than the camp stove. it is larger an made for cooking for families of five to eight which is the typical size of a family, say in india. >> how many campers out there can buy this? how do you get it to them? >> it was about recreation, then after sandy we saw there is
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emergency preparedness market and wanting a low-cost on demand solution for what we need it. the camping market is actually a minority share of what we believe we can do in developing markets. >> all right, folks. now the moment. truth. you heard what jonathan had to say. john, are you in or out o on biolight? >> it is innovative. i think the camping market makes a lot of sense. i think it is priced right, and a lot of great marketing. i'm in. >> diana? >> so many people are thinking about emergency preparedness, because of sandy, even going back it katrina. you just have to go into a hardware store the day before the storm and you know, people are getting ready more and more. and third world implications are huge. i'm in. >> me too. it cooks, walks the dog. i like it. i'm in for that. thanks you for joining us. and to our panel, diana and
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john, that is the power pitch. >> three yeses. how about you? we want to hear from you. are you in or out on biolite. cast a vote and let us know if you are interested or not. michelle? >> cool little stove there, tyler. all right, after the break. suze orman is back on the agenda. sky high gas prices and her unique take on where they will take a bite out of the economy. also coming up, their plan to change the world, think nobel prize. we're coming right back. great, everybody made it. we all work remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys.
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ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages at any fedex office location.
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gold prices right now. sharon is tracking prices. sharon? >> we are seeing a big drop in preshl metals. gold down $25. a key technical level. traders say weg can see gold prices already at seven-month low perhaps fall to 1525 an ounce. we are continuing to watch what happens as well technically as gold has broke below the 1600
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level. that's the technical term a lot of traders look at to see when the short term averaging move below the long-term moving average. that hit and we saw gold prices continuing to slide. last time this happened, last ape rile, gold slid 9%. also a sell off in metals market. a lot of long liquidations and dollars rise contributing to part of what we see here. not only in the gold market but metals in the gold sector. back to you. >> thank you, sharon. >> another beat that sharon covers, energy. gasoline prices have been rising specifically. up 20%. we are already above $4 for averages in hawaii, california and also washington, d.c. so at what point do high gas prices hit the consumer and economy? suze is back. sharon is still in the mix. before we start though,
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congratulations are in order. we just found out suze orman won her eighth gracy award for outstanding talk show. her record eighth. nobody else has come close to winning as many. >> that terrific, suze. >> thank, you guys. thank you, sharon. >> at what point do see we consumers contract on spending or see other impacts? >> i think once you cross the $4 barrier you absolutely have people saying, are you kidding me? for some reason we are okay with 3.50. we kind of got used to it. it took a while for us to get used to 3.50 but at $4 or above. you see 50 cents different. now you look at 7.50 or $10 a week or 40 or 50 or a hundred dollars a month. then people start to freak. when they freak, this is what happens. they stop going out. don't drive to the mall. don't drive to do things. cut back on vacations. all of those things affect who?
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they affect the merchant. people who want to sell these people take something. then it affects earnings of companies and that's what i think we will see with companies with $4 or more of dwas lien. >> we see 3.77 a gallon for gas. master card is seeing spending in terms of clothing, down. in terms of restaurants, flat. but people are changing the way they spend. not going for casual dining, they are going tore fast-food. they have to eat, but they eat as cheap as possible. so with consumer spending, about $100 million more today than a year ago on gasoline. it is taking its toll. don't you think the payroll tax and other taxes that folks are paying is also contributing 20 this? >> yeah. truthfully, the consume wears hit all at once. starting in january. the second week into january.
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not only did they see that 2% payroll tax hike but here is what else happened. i don't think they even get it. they are looking at paychecks and calling into my show going, why is it so much? less than i thought it would be with 2%. remember, now with the 401(k)s, can you put in more this year. normally you all sign up for 15% or whatever the percentage is of a certain amount of money. now what happening is that you may even see more money coming out of your paycheck to get into your 401(k)s and you find out what's happening to me. so yes, less money people see in their paycheck, the more they pay at the pump. it is trouble for the economy. >> we are also getting hit for increases, whether city tax, sales tax, transportation taxes. all of it is hitting a the same time. not just 2% increase. we are seeing as much as 5% increase for some households. that is coming on top of these gas prices at their highest they
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have ever paid for this kind of year. >> and you are going to see because of sandy, in my opinion, you are going to see all these insurance companies now have a legitimate reasons to increase their preem premiums. when you increase a premium on homes, on cars, all of these two things, oh, my god. are you kidding me? >> so let's take the turn here a little bit, suze. if you think that the -- that rising gas prices, higher payroll taxes and other expenses filtering into the economy and affect consumers. then ultimately doesn't that translate somehow into lower profits for corporations as they have to spend more? and maybe lower stock prices? is that part of this? >> yes. i was saying i think it could eventually affect earnings of the companies and people buy stock, last time i checked, based on the projected earnings of the companies. all of this needs to be taken into consideration. especially you know, if we see
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cuts happening in march with the sequester and everything. that's why, when you look at all of this on a whole, you have to look at the housing market, be careful. you just have to be more knowledgeable today and careful today. >> suze, always so great to have you on and all those gracy award are incredibly welldeserved. it is a real treat to have you for the whole hour. >> thanks, michelle. sharon, thank you so much. suze, stick around of course. you can watch the suze orman show every night. she get great ratings for a reason. >> let's get trading action on the floor of the stock exchange. roberto pisani is miking up, getting toward go. >> sharon has been talking about it all day. but normally you don't see commodity stocks move dramatically different than the rest of the stock market. it is true, the dollar is stronger. but i want to show you for
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example, commodity stock etfs. strange with the market just down fractionally that you've got copper miners down 2%. coal miners down 2.5%. gold miners down 3%. even the oil service complex is the oih on the bottom line. >> why is this happening? >> well it is all sort of speculation. somebody may be trying to get out of pogs for various reasons or maybe we have reached a certain important point here. sharon was mentioning that the death cross on the gold stocks, let me just also show you commodity countries as well. and again, you can buy exchange trade fund by country. here is the big commodity countries. russians, brazilians, australians and second line. you see here, all those commodity countries are much weaker than expected. there is some kind of commodity
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delef ra delef ranling. in buying real estate market and -- >> you are talking about the retail market, not the central bank level. >> yes. huge real estate there. we will talk more about that at 2:00. >> all right. thank you, bob. tyler? >> michelle, rick's in. suze and i are just gabbing here. but rick santelli, and he is always welcome to interrupt us, he is following the action at the cme. hi, rick. >> hi, tyler. once again, marching to the song to the equity market for the most part. you can see reversing what we saw yesterday. late in the session, stocks are stronger. that is the cue. let's switch pierce and go to sterling subject. pound versus dollar. 30-month low. pound versus euro. 16 month low. but here is the one that fascinates me.
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pound versus yen. but the pound is at 38-month high. delivering currency crossroads make strange bed fellows. once again, yen might not be the biggest trade. i think the pound cross trades but certainly is under pressure and many technicians are looking for the next wave of potential yen cross selling. let's go back to michelle. >> god it, rickster, thank you. twitter announcing a new advertising initiative. julia boorstin has details from los angeles. julia? >> thanks, right, michelle. twitter is making a move which should dramatically launch its grow avenue. to buy and manage twitter ad through certain third party flat forms. it makes it easier for them to a twitter to their ad campaigns. with 2012 ad revenue came from
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purchases so this is key move for twitter as it looks to ramp revenue ahead of potential ipo. tyler? >> julia, thank you very much. three of silicone valley'sa entrepreneurs. a $33 million break through prize for medical research. john forte has more. >> i want to give a sense of this. keep in mind, the mobile prize just over a million dollars per recipient. this is 3 million and it focuses on life sciences. as you mentioned, these three billionaires teaming up. there are a couple of other people involved as well. chairman of apple will help chair this effort. in future years, there are 11 people receiving the award.
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in future years it is five resip yant. people who receive the award this year will help choose who will people will be. nominations will be open on the web to give a sense of the type of research that's involved here. cancer, metabolism, stem cell research, those are the types of topics they will be attacking. as we know some people involved here have special connections to the medical issues involved. a family member who has a serious disease, we know mark zuckerberg's wife graduated in 2012 with a focus on pediatrics and there is talk of parkinson's disease in sergey bring's family. they are bringing this back to life sciences. >> innocent advising people. i love it. >> it's official. office depot and smaller rival,
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office max, are merging into an all stock deal. it was inadvertently announced this morning before it was completed. office max shareholders get 2.69 office depot shares for reach share they own. here is how both stocks are currently trading. slightly lower but remember they've they got a big pop yesterday. staples as you can see, lower by 95. since it rallied on the initial reports of a merger losing ground. so it is giving back gains that it saw yesterday. tyler? >> two big retailers going head-to-head in manhattan court today. winner gets martha stewart. courtney reagan is live on the scene. hey, courtney. >> hi, tyler. that's right. a battle grewing for more than a year. pitting macy's generals jc penney with one of america's most recognizable domestic powerhouses right in the middle. i have the highlight from the opening margaret from macy's
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side coming up on "power lunch." ♪ [ male announcer ] how do you engineer a true automotive breakthrough? ♪ you give it bold new styling, unsurpassed luxury and nearly 1,000 improvements. introducing the redesigned 2013 glk. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. i work for 47 different companies. well, technically i work for one. that company, the united states postal service® works for thousands of home businesses. because at® you can pay, print and have your packages picked up for free. i can even drop off free boxes. i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small.
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garmin is losing direction. the largest navigation maker with weak earnings and warning 2013 earnings will come in below expectations. company is citing lack of demand for its product. right now shares of garmin trading lower been 3.44, getting hit hard by 9%. $35.80 a share. tyler? >> thanks, michelle. only two weeks from another fiscal face off in washington. we asked on yahoo!, is this the way you invest in the stock market? 32% say yes, i'm concerned. 16% say, no, i'm confident they will reach a deal. and 42% say either way, my portfolios won't be atekted. let's see what is coming up on "street signs."
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>> apple has the biggest cap in tech right now. what company had that in november 2000? what will have that honor in ten years time from now? we are all over that with the fed minutes as well. fed will come out on the show. when you see how the december minutes rocked the market on december 2, you should see what reaction we could have today. do you hold gold? why do you hold gold. we have a big session on why the bull run is over and wlrn it is entering a bear phase. all of those things coming up at the top of the hour. "street signs" is the show, guys. back to you. >> thank you, mandy. macy's and jc penney going head to head in court today and they are arguing over martha stewart. >> two departmentor stores are fighting over the right to sell martha stewart branded prot # product in certain categories. so far we have only heard the opening statement from macy's.
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lawyers explaining how many millions have been invested to build up the martha stewart brand. so much that sales have grown more for the martha brand than the rest of macy's. they presented numerous e-mail exchanges basically detailing that jc penney understood the contractual risk and how tenuous the loop holes were but went ahead with martha stewart multimedia the night before. this is a contractual dipute but in 70 minutes of talking they never showed the judge any term in the contract that was breached. they just told a fancy story. tyler, i got to tell you, "power lunch" featured twice already and macy's opening statement, two separate martha stewart sound bites.
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one from an interview sue did on "power lunch." i guys are famous. >> that's a good way it be in court, i guess, for "power lunch." thanks. let's go to phil lebeau, for good news on boeing. >> executives are heading to washington, d.c. on friday to meet with the administration, federal aviation administration, to discuss fixes that boeing believeses it has can come up with in order to get the 787 dreamliner back in service. they lift the groungd of 787s if you will. still too early to know if this meeting makes it a media ruling. my sense is that the faa knowing the scrutiny it is under and certification process is likely to come out of this meeting. it takes time before making a decision in terms of whether or not these fixes are the fixes needed to get the 787 dreamliner flying again.
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michelle? >> that makes sense when you're saying, phillip. thank you. does your credit score matter any more? should you roll over to a roth now should you co-sign a student loan? suze orman has cold hard answers, yet. right, sooud? >> always, michelle, always. but we can still help you see your big picture. with the fidelity guided portfolio summary, you choose which accounts to track and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next.
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all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.
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time for the power rundown. joining us is suze orman from the suze orman show on cnbc. great for you to spend time with us today. >> thanks, tyler. >> a minute 15, buck and a half, whatever you want. go for it. i know this is an area of interest and concern to you, a trillion dollars worth in outstanding loans at high interest rates for student loans. >> and this is what is sad. kids haven't been educated on what it means to take out student loans. they take more than they can afford to pay back. student loans are not dischargeable in bankruptcy. what is really getting bad is
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because after the credit crunch you couldn't get a private student loan. let's say you maxed out on federal loans and you needed more money, parent have been co-signing -- >> private. >> private student loans. biggest mistake, bar none. >> why? >> because there is no cap on interest rates. they have go to whatever they want to go. again, not dischargeable in bankruptcy. if students die be the parents still owe the money. >> what is the alternative for someone like that who has a big due igs bill at whatever the school is? >> so if you need your parents to help and your parents are willing to help, although i don't think parents should co-sign any types of loans, a parent could take out a loan and this it is okay. but really, don't take out more than your first year's salary in loans. if you do, you're in trouble. >> let's go to a related topic. credit scores today. it was all this talk back during
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the middle of the crisis how americans couldn't get loans because their credit scores were so impaired. >> do those credit scores mean what they used to me? >> yes and more. back then, it is what is the interest rate. now, it is will you have a landlord that will rent to you. what are your car insurance premiums. all kind of things. credit reports which cred the scores will learn from p.m. will your employer hire you. what really is a travesty is information on your credit report correct. >> how do you fix it if it isn't. >> good luck. that's the problem. now we are finding out it is very difficult to correct incorrect information. so are you being denied a service because have you incorrect information? you better check your credit report. >> if you find incorrect information, who do you apreach? the supplier of that information. if it is a defendant store do i good to the department store or credit bureau? >> the way it works is go to the credit bureau.
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supposedly they contact the creditor and it is supposed to be resolved but it is not working that way. be careful. >> the bell has rung on that one. let's move to 401(k)s whaen is your thought on traditional 401(k) or roth where the money comes out of the account untaxed but it is post tax dollars going in. >> so i'm somebody who believes in what you see is what you should get. aim very afraid when you put your money into 401(k) or traditional ira. tax brackets to solve the problem have gone up and up and up. so you see $300,000, but only 150 after taxes. i would rather give the hit now, pay my taxes now to know in the long run when i have 300,000 in the account, it is all mine. >> so roth? >> roth. >> i would rather have a roth that traditional -- i rather have a roth ira ran a roth
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401(k) especially after the mount of the match. >> now a personal question of mine a few months ago as higher tax rates were spend pending there. if i have a traditional 401(k) with sizeable amounts in it, should i convert it a roth? snrs. >> first of all, you can only convert if you are no longer working at the place you were. but the government will be your best friend, sweetheart. >> you owe a lot of taxes. >> and it can't come from the money in the retirement. little by little if you convert, do it little by little and talk with your cpa to know the tax ramifications. >> i followed your advice without even knowing it. i left it there. >> good job. >> suze, great to have you with us. >> thanks, ty. >> hope you come back. >> i will. >> congratulationsed on the award. >> and of course watch the suze orman show every saturday night 9:00 p.m. and 12:00 a.m.
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eastern. and pacific. >> they are all over the ment t, can't you just see them, tyler. a we will have markets at 2:00 p.m. sharp. minutes away. ♪
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